Financial Accounting Exam 1 Review Guide with all
Correct & 100% Verified Answers |Already Graded A+
Accounting Equation ✔Correct Answer-Assets(things you own)=Liabilities(things you owe)
+Equity(stockholder's claim on assets)
Debt Ratio ✔Correct Answer-Total liabilities/total assets
Current Ratio ✔Correct Answer-Current Assets/Current Liabilities
Gross-Margin Ratio ✔Correct Answer-(Net Sales-Cost of Goods Sold)/Net Sales
International Accounting Standards Board (IASB) ✔Correct Answer-Independent group consisting
of members from many countries, creates international financial reporting standards
Generally Accepted Accounting Principles(GAAP) ✔Correct Answer-Made up of principles and
assumptions
Securities Exchange Commision ✔Correct Answer-Created by government to regulate securities
market and protect investors
Principles ✔Correct Answer-Put in place so everyone does things the same way
Revenue Recognition Principle ✔Correct Answer-Recognize revenue when earned (service is
performed)
Matching Principal ✔Correct Answer-Company must record its expenses incurred to generate the
revenue reported
Full Disclosure Principal ✔Correct Answer-Company required to report details of financial
statements
Going Concern Assumption ✔Correct Answer-Business will continue running
Monetary Unit Assumption ✔Correct Answer-Business is measured in monetary units
Time Period Assumption ✔Correct Answer-Life of companies can be divided into time period
Business Entity Assumption ✔Correct Answer-means that a business is accounted for separately
from other business entities, including its owner
Balance Sheet ✔Correct Answer-Assets=Liabilities+Equity
Income Statement ✔Correct Answer-Revenue-Expenses= Net Income
Statement of retained earnings ✔Correct Answer-Balance beginning + Net Income - Dividends =
Retained Earnings
Correct & 100% Verified Answers |Already Graded A+
Accounting Equation ✔Correct Answer-Assets(things you own)=Liabilities(things you owe)
+Equity(stockholder's claim on assets)
Debt Ratio ✔Correct Answer-Total liabilities/total assets
Current Ratio ✔Correct Answer-Current Assets/Current Liabilities
Gross-Margin Ratio ✔Correct Answer-(Net Sales-Cost of Goods Sold)/Net Sales
International Accounting Standards Board (IASB) ✔Correct Answer-Independent group consisting
of members from many countries, creates international financial reporting standards
Generally Accepted Accounting Principles(GAAP) ✔Correct Answer-Made up of principles and
assumptions
Securities Exchange Commision ✔Correct Answer-Created by government to regulate securities
market and protect investors
Principles ✔Correct Answer-Put in place so everyone does things the same way
Revenue Recognition Principle ✔Correct Answer-Recognize revenue when earned (service is
performed)
Matching Principal ✔Correct Answer-Company must record its expenses incurred to generate the
revenue reported
Full Disclosure Principal ✔Correct Answer-Company required to report details of financial
statements
Going Concern Assumption ✔Correct Answer-Business will continue running
Monetary Unit Assumption ✔Correct Answer-Business is measured in monetary units
Time Period Assumption ✔Correct Answer-Life of companies can be divided into time period
Business Entity Assumption ✔Correct Answer-means that a business is accounted for separately
from other business entities, including its owner
Balance Sheet ✔Correct Answer-Assets=Liabilities+Equity
Income Statement ✔Correct Answer-Revenue-Expenses= Net Income
Statement of retained earnings ✔Correct Answer-Balance beginning + Net Income - Dividends =
Retained Earnings
